Brussels, 02/07/2009 (Agence Europe) - On Wednesday 1 July, the European Commission opened an in-depth investigation into the planned acquisition of Austrian Airlines by Lufthansa of Germany. The Commission's initial investigation indicated that the proposed acquisition could, on certain routes, give rise to reduced choice of airline services for passengers and the likelihood of higher fares and that there were, therefore, serious doubts as to the proposed takeover's compatibility with the Single Market.
Lufthansa is the largest German airline with hubs at Frankfurt and Munich airports. It also controls Swiss, based at Zurich airport, Air Dolomiti, Eurowings and low-cost carrier Germanwings. As a leading member of the Star Alliance, it also cooperates closely with a number of other airlines. Lufthansa's proposals to acquire British Midland and Brussels Airlines were cleared by the Commission on 14 May 2009 and on 22 June 2009, respectively (see EUROPE 9926). Austrian Airlines is Austria's largest airline with its principal hub in Vienna. It is a full-service air carrier. Its subsidiaries include Lauda Air and Tyrolean Airways.
The Commission's initial investigation found that the proposed transaction would lead to competition concerns with respect to inter alia the routes from Vienna to Frankfurt, Munich, Stuttgart, Cologne, Zurich, Geneva and Brussels. Lufthansa proposed remedies but the Commission found that these remedies, while reducing significantly the number of problems, were not sufficient to allow the merger to be cleared at this point in time. The Commission says, in a press release, that it will continue to work closely with Lufthansa to resolve the outstanding issues as quickly as possible.
The Commission is still considering state support for Austrian Airlines as part of a separate investigation under EC Treaty state aid rules. (O.L./transl.rt)